Toast the New Year With These 'Boozy' Funds
Investment-wise, 2007 will be remembered as a year when fashions changed faster than at a Paris Hilton soiree.
Large-cap value, utilities, REITs, precious metals, China and large-cap growth came into and out of vogue with numbing regularity.
So to appropriately cap off 2007, we have a list of funds likely to gain and then lose popularity in just a matter of hours.
Assuming you bid adieu to 2007 at a New Year's Eve party, the mutual funds on the accompanying list might appear enticing at around 11:59 p.m. But six or seven hours later, the thought of them is likely to make you roll over in bed and beg for an aspirin.Each of the funds in the adjoining table has more then 6% of its net assets invested in a group of alcoholic beverage stocks. The 24 selected stocks are from the Dow Jones beverage brewers index and that organization's distillers and vintners gauge, as well as other large domestic and international firms in the alcoholic beverages business. In all, 1,386 open-end mutual funds have positions totaling $39 billion in the selected alcoholic beverage stocks. In addition, 139 exchange-traded funds hold positions with a combined value of $4 billion in the group while 41 closed-end funds hold an aggregate value of $492.6 million in the purveyors of intoxicants. Even though Fortune Brands (FO) -- distributor of Calvert alcoholic beverages -- is among the stocks on the adjoining list, you will not find any socially responsible Calvert Group of mutual funds anywhere near the roster of funds holdings those stocks. In fact, what might be accurately described as the antithesis of Calvert offerings and other socially responsible funds, the MUTUALS.com (VICEX) Vice Fund (VICEX) sits comfortably atop the open-end mutual fund section of the list with 23.77% of its portfolio devoted to the selected alcoholic beverage stocks. In addition to booze, the VICEX portfolio focuses on tobacco, gambling and the defense industry. (The Vice Fund's manager, Charles L. Norton, is a contributor to RealMoney.) Its largest portfolio holdings are Altria Group (MO - Get Report) and Carolina Group (CG - Get Report), with beverage giant Diageo (DEO) not far behind. Another concentrated play on the alcoholic beverage industry is the newly debuted (Nov. 30, 2007) FocusShares ISE SINdex Fund (PUF). Besides the alcohol industry, this ETF concentrates its investments on gambling and tobacco. Its largest portfolio holdings are Bally Technologies (BYT) and UST (UST). Ever wondered whether alcoholic beverage stocks are consumer discretionary or consumer staple investments? The definitive answer comes from no less an authority than mutual-fund giant Fidelity; as you can see in the adjoining table, the (FDAX) Fidelity Select Consumer Staples Portfolio (FDFAX) -- note the word "staples," meaning nondiscretionary, in its name -- holds 10 of the hangover stocks, making up 7.72% of its assets. Its largest holdings are Procter & Gamble (PG - Get Report) and Coca-Cola (KO - Get Report). Fidelity isn't alone in its view. Four other funds in the table confirm that the bottle of Jack Daniels belongs on the shelf next to the extra virgin olive oil as a component of your inventory of consumer "staples" (but out of the reach of the kids, of course). With phrases like "consumer staples" or "consumer non-cyclical" embedded in their names, they leave no doubt.
|FUNDS AT LEAST 6% INVESTED IN SELECTED ALCOHOLIC BEVERAGE STOCKS *
|NAME, TICKER & TheStreet.com RATINGS GRADE **||NO. OF ALCOHOLIC BEVERAGE STOCKS *||PCT. OF ASSETS IN ALCOHOLIC BEV. STOCKS||VAL. OF ALC. BEV. HOLDINGS ($MIL.)||12-MONTH TOTAL RETURN (%)||3-YEAR ANNUAL RETURN (%)|
|OPEN-END MUTUAL FUNDS|
|MUTUALS.com Vice Fund (VICEX) A+||8||23.77||36.1||23.17||18.24|
|ING Van Kampen Glb Franch A (N/A) U||4||11.25||48.9||N/A||N/A|
|Van Kampen Global Franchise A (VGFAX) B+||4||11.24||273.5||11.84||15.68|
|Universal Inst Global Fra II (UGIIX) C+||4||11.15||20.5||2.6||12.32|
|MSIF Inc. Global Franchise A (MSFAX) A+||4||11.14||16.0||11.98||15.74|
|ICON Leisure & Consumer Staple (ICLEX) E||3||10.64||3.4||10.37||3.99|
|Rydex Series-Consumer Products A (RYPDX) B+||5||10.63||2.7||15.11||11.02|
|Oakmark Fund (The) II (OARMX) D-||4||8.43||481.8||1.56||5.96|
|First Inv International A (FIINX) U||3||8.31||6.5||19.17||N/A|
|TA IDEX MFS International Equity A (ICIAX) D-||3||7.89||2.3||14.04||16.41|
|AIM Leisure Fund A (ILSAX) D||6||7.88||75.2||6.81||9.96|
|Van Kampen American Franchise A (VAFAX) U||2||7.75||36.7||2.03||N/A|
|Fidelity Select Consu Staples Port (FDFAX) A+||10||7.72||37.7||25.76||17.61|
|MFS Inst Intl Equity Fund (MIEIX) A||3||7.61||227.6||14.59||18.79|
|PL Intl Large Cap Fund A (PAGGX) B+||3||7.57||7.1||13.07||17.16|
|USAA International Fund (USIFX) A-||3||7.44||118.9||14.12||18.43|
|Lazard Intl Equity Select Open (LZESX) A+||3||7.08||2.3||13.96||15.43|
|Symons Alpha Growth Inst (SAGIX) U||2||6.79||1.2||N/A||N/A|
|Phoenix Foreign Opportunities A (JVIAX) A+||3||6.13||79.9||20.51||23.97|
|Artisan International Value Inv (ARTKX) B+||1||6.02||102.5||4.35||16.34|
|FocusShares ISE SINdex Fund (PUF) U||6||21.40||1.0||N/A||N/A|
|Rydex S&P Equal Weight Consumer Staples ETF (RHS) A||4||11.48||0.9||12.22||N/A|
|iShares S&P Global Consumer Staples Index Fund (KXI) A+||11||9.56||6.6||23.41||N/A|
|WisdomTree Int'l Consumer Non-Cyclical Sector (DPN) A+||8||7.99||1.9||19.62||N/A|
|Boulder Total Return Fund, Inc. (BTF) B||3||6.75||24.8||10.0||12.4|
|Lazard Global Total Return & Income Fund (LGI) A||2||6.48||17.2||8.5||12.9|
|S&P 500 Composite Total Return||5||0.52||N/A||7.72||10.09|
|* Of 24 selected alcoholic beverage companies.
** "U" is unrated.
Source: TheStreet.com Ratings - Data as of 11/30/2007.
|FUND HOLDINGS IN SELECTED ALCOHOLIC BEVERAGE STOCKS
|NAME||TICKER||OPEN-END FUNDS||EXCHANGE TRADED FUNDS||CLOSED-END FUNDS||VAL. OF FUND HOLDINGS ($MIL.)|
|Anheuser Busch Cos Inc||BUD||457||53||18||6,294.0|
|Boston Beer Incorporated||SAM||80||22||1||100.0|
|Brown Forman Corporation||BFB||191||50||7||1,316.8|
|Castle Brands Incorporated||ROX||9||0||0||1.2|
|Central Euro Distribution Corp||CEDC||112||19||2||557.1|
|Companhia De Bebidas Das Ameri||ABV||65||8||0||1,541.7|
|Compania Cervecerias Unidas SA||CU||29||1||0||28.6|
|Constellation Brands Inc||STZ||209||39||4||1,813.7|
|Fomento Economico Mexicano Sab||FMX||130||0||2||1,563.9|
|Fortune Brands Inc||FO||319||48||14||3,120.5|
|Fosters Group Limited||FBRWY||18||1||1||405.4|
|Kirin Holdings Company Limited||KNBWY||75||11||1||549.3|
|Lvmh Moet-Hennessy Louis Vuitt||LVMUY||152||14||4||3,046.4|
|Molson Coors Brewing Company||TAP||328||41||8||2,290.7|
|Pernod Ricard SA||N/A||111||11||3||2,824.2|
|Pyramid Breweries Incorporated||PMID||12||0||0||1.4|
|Redhook Ale Brewery||HOOK||12||0||0||3.7|
|Remy Cointreau SA||N/A||39||1||2||532.6|
|Vina Concha y Toro SA||VCO||3||2||0||12.0|
|Willamette Valley Vineyard Inc||WVVI||6||0||0||0.4|
|* Number of funds holding any of the stocks (redundancies eliminated).
Source: TheStreet.com Ratings.
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